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Robin Hood Tax

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  1. #11

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    Quote Originally Posted by PDLM:

    The key thing is that VAST majority of currency and derivative transactions are made solely in the name of gambling by the gambling banks and similar companies. They are gambling HUGE amounts of money at very thin margins in zero sum games amongst themselves with no real benefit to the global economy, and a huge downside when it all goes horribly wrong and they start demanding bailouts from taxpayers.
    I think you underestimate the number of commodities which are traded for "good" reasons and even those "gambling trades" are actually how the markets gain liquidity, the thing which allows the real economy access to a deep and liquid market to hedge in. It's no good if Cathay wants to hedge its fuel costs but goes to the jet-fuel desk and they say "sorry, no trades today, try again tomorrow"! Or if a company loses a customer and then no longer needs its currency hedge but they cannot trade out of the position and are stuck with the risk! The speculators are playing an extremely important role in the bigger picture.

    And while I hate to agree with DeletedUser, he is right to point out that many of the players in the wealth management aspects of financial markets are pension funds who are managing money for small (not wealthy) individuals and who also need access to deep and liquid stock and other markets.

    I do agree that banks who have been bailed out should pay that money back before they pay bonuses - is there evidence of any companies that have NOT paid their bailout back giving huge bonuses? (genuine question, I don't know).

  2. #12

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    Moving, pretty much all the banks in the UK, with thr exception of Northern Rock, who, if I recall properly, are making serious losses and trying to hive off certain non-toxic parts of the business. For RBS, see http://m.guardian.co.uk/business/2011/feb/24/rbs-bankers-bonuses-despite-loss?cat=business&type=article

    My view of pension funds is if you don't understand the risks your pension fund manager takes on your brhalf, your should not be compelled to provide for your pension in that way. This is the MPF and Stakeholder pensin scheme. In the UK. I haven't the foggiest how to play the stovk market, therefore I don't. Why should Joe Public's retirement pot be linked this way?

    Last edited by luckycat; 06-11-2011 at 08:56 AM.
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  3. #13

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    Quote Originally Posted by MovingIn07:
    I think you underestimate the number of commodities which are traded for "good" reasons and even those "gambling trades" are actually how the markets gain liquidity, the thing which allows the real economy access to a deep and liquid market to hedge.
    At a presentation be the LME a few years ago they suggested only a small % of the trades where actually from hedging activities of commodity users with the vast majority being speculative plays (a zero sum game). You are right that the majority adds liquidity for the minority but at what cost? If the LME which is backed up by physical inventory is mainly speculative trades what about the rest of the 'finance' industry.

    There is a difference between value creation through finance and gambling on the stock market 9who's got the best algorithm). A Robin Hood tax would have limited impact 'investment finance' that seeks out good investment to grow the economy and 'mass trading' looking to gain an edge but not really being that concerned about the underlying assets long term capabilities.

  4. #14

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    Quote Originally Posted by luckycat:

    My view of pension funds is if you don't understand the risks your pension fund manager takes on your brhalf, your should not be compelled to provide for your pension in that way. This is the MPF and Stakeholder pensin scheme. In the UK. I haven't the foggiest how to play the stovk market, therefore I don't. Why should Joe Public's retirement pot be linked this way?
    How else would you provide for your pension? Are you saying that everyone should avoid capital markets? I didn't really understand your point.

  5. #15

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    Quote Originally Posted by MovingIn07:
    It's no good if Cathay wants to hedge its fuel costs but goes to the jet-fuel desk and they say "sorry, no trades today, try again tomorrow"!
    Hedging fuel costs did not do Cathay much good in 2008.

    Cathay Pacific fuel hedge losses nearly $1 billion

  6. #16

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    If you reduce FTT to 0.005% on all financial transactions and collect it worldwide, the amounts will be huge. Currency futures, Commodities futures, all monies deposited or withdrawn from the bank or financial institutions.
    If you deposit or withdraw HK$10,000/ the FTT will be only HK$0.50.

    Quote: "A Financial Transaction Tax (FTT): A tiny tax of about 0.05% on transactions like stocks, bonds, foreign currency and derivatives. Could raise £250 billion a year globally. Well-tested, cheap to implement and hard to avoid." unquote

    Last edited by Oldtimer; 06-11-2011 at 11:35 AM.

  7. #17

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    Are you seriously suggesting that there should a tax whenever money changes hands in any circumstances whatsoever ("all financial transactions")?

    If so then you clearly haven't thought that through!


  8. #18

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    Quote Originally Posted by MovingIn07:
    How else would you provide for your pension? Are you saying that everyone should avoid capital markets? I didn't really understand your point.
    Paintings, gold, property, back editions of vogue etc etc. It is a genuine question. Why is it mandatory to risk your pension thru capital markets?
    drumbrake and dear giant like this.

  9. #19

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    Quote Originally Posted by PDLM:
    Like every time I move money in or out of my bank account? Not sure I'm too keen on that!

    The whole point of the tax as proposed (and hence its name) is that it is redistributive: only relatively wealthy people deal in stocks, bonds, foreign currency, etc.
    Not true in Hong Kong... at all. Here it's not unusual for a cleaning lady to be staring intently at stock market graphs.

  10. #20

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    Quote Originally Posted by justjoe86:
    Not true in Hong Kong... at all. Here it's not unusual for a cleaning lady to be staring intently at stock market graphs.
    And every time the cleaning lady trades, she pays a small amount of stamp duty (plus some other levies).

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